Govt tries to save MSMEs by tweaking public procurement policy: Report

The government in an endeavour to save small and medium companies during the pandemic has removed the profit criterion from the public procurement policy according to a report by Hindustan Times.

Now whether the firm is supposed to receive government help will be judged from their net worth alone. One of the sources who spoke to Hindustan Times said, “the government has accepted the industry suggestion that the financial capability of the builder to execute the contract should not be judged based on profitability, but the basis of net worth.” The net worth will take into account all assets of a firm excluding the debts.”

Many of the MSMEs have suffering financial losses during the pandemic. The clause has a condition that the net worth of the firm that is bidding should not be negative and that it should not have gone down by more than 30% in the past three years.

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